Dec 24, 2011

Hawaii Planning Study 2011 shows future of Building Activity in Honolulu

As posted on HHFDC website, here are just highlights of my favorite parts:

 This chart suggests that construction and Building Permit activity will remain at recession levels until 2020 -- that seems to be the year the blue and red bar climb over the horizontal gray line (2,000 housing units) threshold. 

So if you're in the construction industry, buckle your seat belts or look for a 2nd job (not in the same industry). Or go back to school and don't graduate until 2020.

Graph at left shows price resiliency of Honolulu market as compared to other major metropolitan areas. Particularly evident in recent years preceding the Great Recession, Honolulu real estate prices went up quickly but did not correct or revert to the mean, as other markets did. 

One explanation for this is that the Honolulu market is over-regulated and therefore suffers from a more severe supply-demand imbalance where the  demand for housing in Honolulu far exceeds supply. Simply put, we need more housing.